Keeping Score: Why the MLS has Launched a Venture Fund In-House ⚽️
The MLS Innovation Lab, a program designed to identify cutting-edge startups and advanced technologies, can offer a "one plus one equals three" scenario, explains Mihir Kumar
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BIG IDEA
At the beginning of the year, Major League Soccer (MLS) Emerging Ventures announced the exciting launch of the MLS Innovation Lab.
Cleverly, this program was designed by the league to identify cutting-edge startups and advanced technologies that will help develop the next generation of athletes, enhance the fan experience, and drive continued growth for the league and its clubs.
The inaugural cohort features six startups (selected from 451 applicants for the program) and is focused on three core areas to help them get there: player development, fan engagement, and media technology.
A-Champs (Spain 🇪🇸)
CAMB.AI (UAE 🇦🇪)
Fabric (US 🇺🇸)
Fitogether (South Korea 🇰🇷)
Reeplayer (US 🇺🇸)
STAIDIUM (US 🇺🇸)
As Mihir Kumar (Senior Director, MLS Emerging Ventures) explained on the latest episode of the Sports Pundit Podcast, the MLS’ prominence in the North American soccer ecosystem was a huge driving force for this launch.
The concept of sports leagues, particularly in North America, investing in startups is not entirely new. The likes of the NFL, MLB, and NBA have already created their own programs to invest in and foster innovation (as I’ve covered previously).
However, this move from the MLS does help to set them apart from competing soccer leagues. This is particularly true in Europe, where due to elements like promotion and relegation, such initiatives have been less common.
“We have this incredible ecosystem of assets, which gives, from an innovation lens, a lot of opportunities for us to test and iterate and plug things into different places to see how they perform,” said Kumar.
As well as the 29 (soon-to-be 30) top-tier MLS clubs, the ecosystem also comprises of MLS NEXT Pro, MLS NEXT, and MLS GO, a recently launched recreational soccer league poised to grow to approximately two and a half million players.
Moreover, properties like MLS NEXT FEST, Generation adidas Cup, MLS NEXT Cup, and the MLS NEXT All-Star Game offer diverse platforms for the startups within the MLS Innovation Lab cohort to test their products in real-world soccer environments.
“Ultimately,” Kumar continued, “we think MLS Innovation Lab has tremendous value for us at the league and our clubs, but also for the participating companies, through their ability to directly integrate into that ecosystem... [where] they can test and develop their products.”
This synergy benefits both the league and the participating companies by creating a platform for direct integration, evaluation, and potentially broader application within the soccer ecosystem, a level of support that a traditional venture capital (VC) fund would struggle to provide.
This value is also shown through the exposure that the companies within the cohort are given.
“We can give the cohort the opportunities to pitch, to demo, to show, the right people,” explains Kumar. “Is it the [Chief Soccer Officers] CSOs? Is it the [Chief Business Officers] CBOs? Is it the [Chief Marketing Officers] CMOs? Is it the players? Is it the owners? We're able to connect those dots, which is what makes it very unique and very valuable for the cohort.”
Every startup would dream of having a direct line to influential decision-makers.
Often times, these are individuals who are swamped with hundreds of vendors reaching out, each trying to sell them on the next latest and greatest thing. Providing a way for these startups to cut through is therefore extremely valuable and shouldn’t be underestimated as far as perks go.
For the clubs, this level of due-diligence at a league-wide level gives them an increased confidence when assessing the company. In turn, picking up the speed at which innovation can be implemented across the league (versus if a club was to tackle each area of innovation completely on their own) - at least in theory.
For Kumar, this unique approach aims to create a "one plus one equals three" scenario where the combined resources of MLS and the start-ups’ cutting-edge technology combine to generate truly differentiated solutions for the marketplace.
Take Camb.AI for example, an AI dubbing platform that uses a large language model (LLM) to instantly translate audio content into various languages.
“We're working in a proprietary fashion with Camb AI],” explained Kumar. “They have access to things that other LLMs out there are not going to have access to… The whole premise of MLS Innovation Lab is that we're able to provide value that's unique to some of these companies.”
With companies like Spotify aiming to create innovations in a similar space as Camb.AI, this sort of differential could be crucial in their potential success.
Though that success is still far from guaranteed, as with any venture investment, the MLS Innovation Lab presents a promising win-win opportunity for both the league and its startups.
As such, I’m all for it, as long as their openness to external innovation is also maintained.
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THE PODCAST
Want to hear more from my conversation with Mihir?
We discuss launching the MLS Innovation Lab, applying innovation across the MLS ecosystem, sourcing investment opportunities, areas of focus for MLS Innovation Labs’ future cohorts, TOCA and opportunities around live experiences, and whether the MLS could create their own consumer products.
Listen to the full podcast via the link below - and I’d love to hear what you think!👇
The Sports Pundit Social Club (SPSC) was designed to enable you to hang out with other readers (i.e. exceptional folk from across the industry) without the heavy cost that often goes with traditional sports industry events.
To see upcoming events in Feb in places like London, Manchester, New York, and LA, and to reserve your place, follow this link below 👇
JOB BOARD
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Manager Operations & Fan Engagement - PGA TOUR (Florida, US)
New Partnerships Manager - Tennis Australia (Melbourne, Australia)
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Sports Pundit (Andy Marston) is excited to be part of What The Footie’s Athlete Investor Summit on Friday 22nd March.
The event will feature panels and fireside chats from speakers including recent Sports Pundit Podcast guest Matt Gentry, as well as:
Dame Jessica Ennis-Hill: Olympic Gold Medallist & Co-Founder of Jennis
Chris Smalling: Professional Footballer, Athlete Investor & Investor in the Players Fund
Eric Dier: Athlete Investor & International Footballer
Fergus and Ruari Bell: Managing Partners of the Players Fund
Stuart Duguid: Co-Founder & CEO at EVOLVE Agency and Hana Kuma & Agent to Naomi Osaka
Toby Wakefield: Brand Director for Jesse Lingard & MD of Jlingz Esports